Dr. Reddy’s · detailing-driven markets • North America (54%), India (15%), Russia (12%) are key markets in this segment. • Building a sustainable Biosimilar business Pharmaceutical

Dr. Reddy’s Investor Presentation 2015

Dr. Reddy’s Laboratories Limited Hyderabad, India

NYSE: RDY

This presentation contains forward-looking statements and information that involve risks, uncertainties and assumptions. Forward-looking statements are all statements that concern plans, objectives, goals, strategies, future events or performance and underlying assumptions and other statements that are other than statements of historical fact, including, but not limited to, those that are identified by the use of words such as “anticipates”, “believes”, “estimates”, “expects”, “intends”, “plans”, “predicts”, “projects” and similar expressions. Risks and uncertainties that could affect us include, without limitation:

• General economic and business conditions in India and other key global markets in which we operate; • The ability to successfully implement our strategy, our research and development efforts, growth & expansion plans and

technological changes; • Changes in the value of the Rupee and other currency changes; • Changes in the Indian and international interest rates; • Allocations of funds by the Governments in our key global markets; • Changes in laws and regulations that apply to our customers, suppliers, and the pharmaceutical industry; • Increasing competition in and the conditions of our customers, suppliers and the pharmaceutical industry; and • Changes in political conditions in India and in our key global markets.

Should one or more of such risks and uncertainties materialize, or should any underlying assumption prove incorrect, actual outcomes may vary materially from those indicated in the applicable forward-looking statements. For more detailed information on the risks and uncertainties associated with the Company’s business activities, please see the Company’s Form 20-F for the fiscal year ended March 31, 2014, and Form 6-K for the quarter ended June 30, 2014, September 30, 2014, December 31, 2014 and its other filings with the Securities and Exchange Commission. Any forward-looking statement or information contained in this presentation speaks only as of the date of the statement. We are not required to update any such statement or information to either reflect events or circumstances that occur after the date the statement or information is made or to account for unanticipated events

1

Safe Harbor Statement

Contents

1. Company Overview

2. Strong performance over the past decade

3. Exciting future

2

Global Generics

• Finished dosage businesses in distribution-driven as well as detailing-driven markets

• North America (54%), India (15%), Russia (12%) are key markets in this segment.

• Building a sustainable Biosimilar business

Pharmaceutical Services & Active Ingredients

• Amongst the leaders in supply of generic APIs globally

• Customers include generic manufacturers, innovator companies

Proprietary Products

• Focus on building sustainable and profitable proprietary products business

• Strong pipeline of differentiated formulations

Access to affordable medicines Partner of Choice Meeting unmet medical needs

FY15 Revenue mix 81% of total FY15 Revenue mix 18% of total

We have a vertically Integrated business model with 3 distinct segments

3

FY15 Revenue mix 1% of total

Dr. Reddy’s Today …

4

• FY15 global revenues of $2.4Bn. Well diversified across India, US, Emerging markets &

Europe.

• Steady improvement in capital efficiency & productivity over the last five years.

• Excited about profitable growth opportunities in the future. Well placed to harness these

opportunities.

• R&D driven strategy [spend at ~12% to sales]. 1200+ scientists involved in process & product

innovation.

• Last three years characterized by sustained focus on Portfolio management, Operations

excellence, Science & Technology capabilities and superior Commercial choices across

markets.

• Strong visibility of realizing full potential of our Emerging businesses of Proprietary products,

Biologics and Aurigene.

Key strengths and capabilities

Industry leading chemistry skills

• Several niche product opportunities (tacrolimus , metoprolol succinate, azacitidine, divalproex sodium ER, sumatriptan auto-injector)

Deep market presence

Branded generic markets - India, Russia (entry in 1991), CIS countries, Venezuela and others

Generic markets – USA (1997 – first ANDA filing), UK and Germany

Vertically integrated organization with modern Infrastructure

• R&D centers in India, UK, Netherlands and US

• 10 formulation manufacturing facilities (5 USFDA inspected) with 25+ billion units in generics capacity

• 9 USFDA inspected API manufacturing facilities

• Biologics development and manufacturing in India

Early mover advantage in Biosimilars

• First to launch Biosimilar rituximab in 2007

• 4 biosimilar* products being marketed

Collaboration across business units

5

*Similar biologic approved under abbreviated processes preceding the establishment of formal biosimilar regulatory guidelines

Our Journey

6

Cu

sto

me

r co

nn

ect

Generics

Specialty Generics

Complex Generics

High

Lo

w

Low High

• Large PKPD studies and PMS • Product ideation/ device integration • Packaging development

• Connect with physicians, patients and payers

• Pharmacoeconomics • Branding and promoting

capabilities

• Connect with Distributor, Retailer, GPO, Clinics and Hospital network

• Hub service programs

• Clinic and complex Bio studies • Shaping regulatory pathway • Development of multiple dosage forms

How ?

Technical Capability

Contents

1. Company Overview


3. Exciting future

7

447 546

1,510 1,250 1,365

1,563 1,677

1,901 2,133 2,203

2,400

Strong revenue growth over the last decade

Revenues Million USD

All figures converted at respective periods’ convenience translation rates (as reported in our Form 20-F)

FY13 FY12 FY11 FY10 FY09 FY08 FY07 FY06 FY05 FY15 FY14

+18% • Authorized

generic launches

8

Our capital efficiency and profitability steadily improved and has remained stable over the last 5 years

PAT adjusted for one time non cash impairment charges primarily related to betapharm

RoCE mentioned above is pre-tax RoCE

RoCE % PAT % to sales

9

Percent

22% 21%

30% 28% 28% 26%

FY10 FY11 FY12 FY13 FY14 FY15

13%14% 16% 15% 16% 16%

FY10 FY11 FY12 FY13 FY14 FY15

In FY15, we achieved several important milestones

10

• US Generics crossed $1Bn in revenues

• US Injectables business scaled-up to $280mn+ in

3 years.

• Superior supply chain enabled strong market

share gains in US and serviced significant scale-

up in demand from Venezuela market.

• Improvement in global generics margins.

• High-quality pending ANDA pipeline. Increasing

share of complex molecules.

• Our new businesses of Proprietary

products & Biologics are stepping closer to

their desired milestones. PP filed 3 NDAs

with the US FDA. Biologics phase-1 trials

of Peg-filgrastim & Rituximab on track.

• Aurigene & Curis Inc.: Collaboration

agreement focused on immuno-oncology

and selected precision oncology targets.

• Continue to explore strategic Business

Development and M&A as levers for

growth: Habitrol in US and UCB’s select

portfolio in India

Our North America Generics base business grew at 27% CAGR ( FY15 gr:15%) while building a pipeline of limited competition products

11

Dr. Reddy’s: Now ranked# 9th among the leading US generics companies

47 Rx products ranked top 3 in market share

Leading private label- OTC player; strong No: 2 after Perrigo

Revenues Million USD

Market shares of limited competition products have been stable Base Revenues grew at 27% CAGR

+27% Upside revenues

413 570

738

100

FY13 FY14 FY12 FY11

921

Increasing mix of non-retail channels of OTC & Health systems

14% 20% 19%

34% 39%

FY11 FY12 FY13 FY14 FY15

OTC OTC +

Health Systems

Source: IMS generic volume market share

Product Jan’15 Mar’15

Decitabine 76% 85%

Azacitidine 66% 50%

Divalproex ER 20% 20%

Zoledronic Acid (Reclast) 61% 63%

Sumatriptan Autoinjector 33% 23%

1,062

FY15

OSD, 28

Complex OSD, 9

Inj, 9

Complex Inj/ Sterile, 13

Softgel, 5

Topical/ Transdermal,

4

Healthy pipeline of high entry barrier products while building a pipeline of limited competition products

68 pending ANDAs & 3 pending NDAs (505b2s) of ~$36 billion of innovator brand sales value

‒ incl. 43 para-IV and 13 first to file products

Portfolio of products based on –

‒ Complex Characterization / Analytical chemistry

‒ Novel regulatory pathway

‒ Large & complex clinical / Bio-studies

‒ High technology barrier in development & manufacturing

Fast-following on Potential OTC switches leveraging developed Rx assets

Market shares of limited competition products have been stable Number of pending ANDAs by Dosage form

12

Our Russia business grew at 14% CAGR (FY15 gr:13%) while building a growing OTC business

Revenues grew at 14% CAGR

13

• Established strong presence in Pain

Management, Gastro Intestinal and Anti-

infectives therapies

• Top 5 brands occupy the No. 1 spot in their

respective INNs and 12 brands in the top 3

ranks

• Increasing mix of OTC sales.

• A number of products launched through BD

efforts – converted into mega brands

Revenues Million Ruble

5,930 6,816

8,038 8,891

10,013

FY 11 FY 12 FY13 FY 14 FY 15

+14%

Venezuela: fastest growth across all companies in both units and value

Revenues USD Million. • Committed to the market to ensure availability

• Economic turmoil an opportunity to stay invested in

the market and strengthen the base for future

• Ranked 20th in value terms and 12th in unit terms,

which clearly highlights our endeavor to provide

affordable medicines to patients

• A balanced portfolio across therapeutic areas of

Cardio-Vascular, Central Nervous system, Anti-

Infectives and Oncology

14

26 26 35

48

136

FY 11 FY 12 FY13 FY 14 FY 15

Absolute growth Billion USD

Source: IMS, The Global Use of Medicines: Outlook Through 2016

79

99

120

Rest of World

Pharmerging

Developed

2012-2016 2007-2011

298

32-38

We enjoyed 28% revenue growth during 2008-13 in our emerging markets

Pharmerging market is expected to account for majority of the absolute growth

Further, we are well positioned to increase access in the growing Emerging markets

26-41

219-249

Note: 17 high-Growth ‘Pharmerging’ Markets: China, Brazil, Russia, India, Venezuela, Poland, Argentina, Turkey, Mexico, Vietnam, South Africa, Thailand, Indonesia, Romania, Egypt, Pakistan and Ukraine

Direct presence Indirect presence (through partner)

161-170

Venezuela

New Zealand

South Africa

India

Sri-Lanka

China

Russia

Jamaica Vietnam

Australia

Myanmar

CIS

Brazil

Mexico

Turkey

15

1169 1294

1456 1,571 1,787

Our India business grew at 11% CAGR (FY15 gr:14%) while improving business health

Revenues INR Cr.


+11%

• MQT April 2015 growth of 25.9% vs IPM growth of 17.7% (Source: IMS)

• Turnaround on the back of • Focused sales & marketing efforts on mega brands

• Improving new launch productivity

• Scale-up in institutions sales

• Deep focus on Chronic and Super-specialty therapies

• Strategic business development and M&A efforts

• Differentiated assets in relevant therapies

• Growth through inorganic opportunities

16

Despite modest growth, Pharmaceutical Services & Active Ingredients continues to be strategic business

Revenue Million USD

All figures converted at respective years’ average translation rate


427

501

568

404 418

• Our value proposition

‒ Accelerate first to market access for our partners through non-infringing IP positions

‒ Invest in technology platforms to develop complex APIs

‒ Flexible to meet customer demands Business faced demand challenges on the external front this year

17

• Effective partnerships with top global Generics

players : ~40% of sales contributed from global

top 5 players

• >60% of Global Generics segment’s sales from

the vertically integrated APIs

Contents

1. Company Overview


3. Exciting future

18

Our purpose has guided our customer value proposition leading to specific strategic choices

To accelerate access to affordable and innovative medicines because

GOOD HEALTH CAN’T WAIT

Customer value proposition

Key Strategic choices

Drivers for future growth

Purpose

• Bring expensive medicines within reach

• Address unmet patient needs

• Help patients manage disease better

• Equip partners to succeed

• Ensure products are always on the shelf

• First-to-market, Tough-to-make products

• Differentiated formulations for unmet medical needs

• Value added services for patients

and customers

• Reliable & flexible supply chain

19

Beyond the core API-GG integration, there is significant ongoing collaboration across business units

20

Market/ Commercial collaborations

US Emerging Markets

• Leverage India BD deals to Emerging markets

• Overlap between Complex generics and Proprietary Products Assets

• Complex generics leverage to Russia, CIS, Venezuela

• Drive market expansion to Latin America

• Expand potential in China

India Emerging Markets

US Proprietary Products

R&D collaborations

Bio. Global Generics

• Characterization of complex molecules

• Purification technologies API

• Differentiated products for India & EM

Global Generics

Bio.


Product differentiation

Be First to market with tough-to-make products and Differentiated formulations

1 • IP- and

technology-driven active ingredients (API business)

2 • Complex

generics and biologics (Pure generics and Biologics)

3 • Differentiated

formulations and novel products for unmet needs (Branded generics and Proprietary products)

21

Product differentiation Key R&D shifts for product differentiation

Clear technology choices Strengthening Manufacturing

Globalizing R&D External R&D relationships

22

Product differentiation We globalized R&D to get access to right talent to solve complex scientific challenges

23

Complex Chemistry Centre of Excellence Cambridge, UK

Complex Injectable Centre of Excellence Leiden, Netherlands

• Product Development Centres, Hyderabad & Bangalore

• Aurigene Discovery Technologies Ltd, Bangalore

Complex generics & Proprietary products Princeton, NJ, USA

External partners

Canada

US UK Germany

Italy

Biologics

We are well positioned to participate in the Biosimilar opportunity…

Filgrastim Rituximab Darbepoetin alfa Pegfilgrastim

First approved biosimilar* monoclonal antibody

First biosimilar* filgrastim (G-CSF) in India

First biosimilar* darbepoetin alfa

Break-through in affordable pegfilgratsims

2001 2007 2010 2011

Successfully commercialized products in Emerging Markets ~35% CAGR growth in Biologics revenues from India & other Emerging Markets over the past 4 years ($94 Mn. Sales)

EMERGING MARKETS DEVELOPED MARKETS Growth arising from the need for

access to expensive treatments In the near term (FY’17), almost all

revenues are expected to come from Emerging Markets

Growth arising from payer pressure to reduce healthcare costs

Two assets in clinical development with three others in pre-clinical development

Revenues to scale significantly post FY’20

Exciting future opportunity for us Market opportunity of around $20 Bn through a large number of biotech drugs ($75-85 Bn.) coming off-patent by 2020. Our current portfolio covers most of the top biologics coming off patent.

24

*Similar biologic approved under abbreviated processes preceding the establishment of formal biosimilar regulatory guidelines

Biologics

… with our strengths well complemented by Merck Serono’s

Our Key Capabilities

Fully integrated development team

skilled in end-to-end development of biosimilars

Advanced cGMP manufacturing capabilities across drug substance manufacturing and fill-finish

Expertise in understanding and interpreting evolving biosimilar guidelines and regulations

Key Capabilities harnessed from our partner, Merck Serono

Significant expertise and capacity in

biologics manufacturing and experience with large clinical development programs

Strong presence in EU and large emerging markets with long standing experience and relations with specialty physicians

25


Building targeted Dermatology and Neurology franchises powered by lower risk innovation model

Potential sales of $100-300MM per opportunity if target label is achieved, with first filings in FY18

• Target only specific segments of patients, with specific conditions within Dermatalogy and Neurology

• Pursue an innovative R&D approach with lower risk

• Develop and bring these products all the way to the patient – not through a licensing partner

• Complement products with patient-oriented solutions that can further improve outcomes for these conditions

Key business choices & approach

• Commercial footprint for Dermatology - $ 40 mn in sales - 54 sales reps - Portfolio of steroid

responsive dermatoses and Acne

• First set of NDA filings

• 1-2 NDA filings per year

Key milestones

2015/16

In place already

2016/17 onwards

26

Value added services

Services aimed at improving patient outcomes or customer needs

1 • Provide

innovative services around our products (Proprietary Products)

2 • Enable

doctors & pharmacists to create better outcomes (Branded generics)

3 • Value added

service offerings. (API and pure generics businesses)

27

• During the last decade, our top line grew at 18% CAGR with a healthy profitability, on the

back of strong performance from US generics and branded formulations in Emerging markets.

• We are excited about profitable growth opportunities in the future. We are well placed to

harness these opportunities, on the back of our aggressive short-medium term investments in

R&D and infrastructure

‒ Differentiated APIs for key customers early enough to create consistent first-to-market

opportunities

‒ Strong growth in pure generics through tough-to make products with significant ramp up in

complex Injectables and Topicals

‒ Growth in branded generics markets driven by differentiated products for addressing unmet

patient needs, supported by services that enhance patient outcomes

‒ Reliable and flexible supply chain, capable of meeting demand surges and ensuring on-the-

shelf medicine availability always

‒ Investment in biologics and proprietary products to power growth beyond FY20

In summary…

28

Backup

29

Q4 FY15 Performance

• 1 ANDAs filed

• 20 DMFs filed

• $83 mn 13.3% to sales

• $129 mn 21% to sales

1.5% YoY gr

• $ 621 Million 11% YoY gr

Revenue EBITDA

Filings R&D

All US dollar figures based on convenience translation rate of 1USD = Rs 62.31 30

FY15 Performance

• 13 ANDAs filed

• 77 DMFs filed

• $280 mn 11.8% to sales

• $580 mn 24.4% to sales

9% YoY gr

• $ 2,378 Million 12% YoY gr

Revenue EBITDA

Filings R&D


Key Balance Sheet Items

Cash & Cash Equivalents & current investments

Net Operating Working Capital

Property, plant & equipment

Goodwill & Intangibles

Loans & borrowings (current & non current)

Equity & Reserves

March’15 March’14

636 538

893 747

772 713

264 236

692 718

1,786 1,687

$ mn

o Capital expenditure during FY15 $149 mn

o Current Cash flow hedge options of ~ $440 mn [range of Rs 60 to Rs 64.5] and RUB 1760 Mn [Rs 1.16]


©2015 Dr. Reddy's Laboratories Limited. All Rights Reserved.

33

Documents

Dr. Reddy’s · detailing-driven markets • North America (54%), India (15%), Russia (12%) are key markets in this segment. • Building a sustainable Biosimilar business Pharmaceutical